For­eign share lim­i­ta­tions in fi­nan­cial sec­tor to end in 2020

2019

China will scrap for­eign share­hold­ing lim­i­ta­tions in its fi­nan­cial sec­tor in 2020, a year ahead of sched­ule, Chi­nese Premier Li Ke­qiang said on Tues­day, giv­ing fresh im­pe­tus to for­eign in­vestors ea­ger to cap­i­tal­ize on the world’s sec­ond-largest econ­omy that has opened its door even wider to the out­side world.

China will also ease own­er­ship limits for for­eign in­vestors in the auto sec­tor and en­cour­age for­eign in­vest­ments in man­u­fac­tur­ing, while re­duc­ing its neg­a­tive list for for­eign in­vest­ments, Li said in a key­note speech at the An­nual Meet­ing of the New Cham­pi­ons 2019, also known as Sum­mer Davos in Dalian, North­east China’s Liaon­ing Prov­ince.

The world has ben­e­fited from glob­al­iza­tion, the Premier stated, not­ing that China sup­ports WTO re­forms and ad­heres to free trade. China has been un­der great pres­sure and un­der­gone tra­vails amid ef­forts to push for glob­al­iza­tion, he said, re­it­er­at­ing the na­tion’s stead­fast push for con­tin­ued open­ing-up.

His re­marks were warmly re­ceived by fo­rum par­tic­i­pants. Seventy per­cent of this year’s fo­rum par­tic­i­pants come from out­side China, and the US comes only af­ter China in the num­ber of at­ten­dees.

“It was a very pos­i­tive speech, it in­di­cated China’s strong de­ter­mi­na­tion to open up and re­form. It in­cluded a num­ber of spe­cific prom­ises, which is very en­cour­ag­ing. We look for­ward to see­ing these prom­ises ful­filled. If we do, I am sure we will see an in­crease in for­eign busi­ness ac­tiv­ity in China,” said Ti­mothy Strat­ford, chair­man of the Amer­i­can Cham­ber of Com­merce in China and a for­mer as­sis­tant US Trade Rep­re­sen­ta­tive.

Big­ger tax and fee cuts were also a highlight of his speech. “When I met with busi­nesses ex­ec­u­tives yes­ter­day, they felt that big­ger tax and fee cuts are the most ef­fi­cient mea­sures they have seen,” the Premier said, stress­ing that the gov­ern­ment will honor all tax cut com­mit­ments. And in­stead of be­ing spent on em­ployee salaries and wel­fare, an amount of money thanks to the tax cuts has been in­vested in R&D, the Premier said.

It’s en­cour­ag­ing that the busi­ness com­mu­nity, root­ing for the Chi­nese econ­omy, is now con­sid­er­ing a greater com­mit­ment to the mar­ket.

“We ac­tu­ally bring star­tups from Switzer­land to China, so to have this mes­sage of a strong IPR and also on the in­vest­ment side in a struc­tured way is very ben­e­fi­cial,” said Felix Moes­ner, CEO of the Sci­ence Con­sul of the Con­sulate Gen­eral of Switzer­land in Shang­hai.

“We re­ally feel there are nice progresses go­ing on and I think that the fu­ture holds even more op­por­tu­ni­ties, Moes­ner told the Global Times.

Fairer en­vi­ron­ment

The Premier pledged sup­port for the cre­ation of a fairer in­vest­ment en­vi­ron­ment and vowed ef­forts to cut taxes, lower tar­iffs and re­move non­trade bar­ri­ers – es­sen­tially en­cour­ag­ing the flow of cap­i­tal, tal­ent and goods. “This is fun­da­men­tal to the vi­a­bil­ity and sta­bil­ity of the econ­omy. It gives for­eign busi­nesses the con­fi­dence to up their stakes in the Chi­nese mar­ket,” said Yin Zheng, ex­ec­u­tive vice pres­i­dent of French en­ergy man­age­ment and au­to­ma­tion firm Sch­nei­der Elec­tric.

Aside from that, China’s growth woes ap­pear to have been largely de­fused, de­spite the na­tion’s trade ten­sions with the US. Official data showed that the econ­omy ex­panded 6.4 per­cent year-onyear in the first quar­ter, faster than ex­pected.

“When the Sum­mer Davos be­gan here 13 years ago, who could have imag­ined that China could de­velop into a mar­ket with 1.3 bil­lion mo­bile phones?” asked the Premier. He be­lieves this in­di­cates the mar­ket’s tremen­dous con­sump­tion po­ten­tial.

In light of the size of the econ­omy, an an­nual growth rate of around 6 per­cent is still im­pres­sive, and the push for qual­ity growth and the gov­ern­ment’s pledge to im­ple­ment a pru­dent mon­e­tary pol­icy clearly in­di­cates the econ­omy’s re­solve to achieve long-term sus­tain­able growth, Yin said.